Why Do Most Investors Stop Purchasing After Two Properties??

[jaycee]

Or maybe dont 'believe they can.

Sit down on the couch and tell me what you think Im saying.

Yeah that would increase my portfolio just nicely

I've got no idea what you're saying, which is why I asked the question ????..

You do sound to me like you are asking questions to draw out the anwer you want or something...

I just thought your answer might tbe interesting, I didn't mean to make you roll your eyes at me...

Of course people don't beleive they can... or need to, you know this of course... which is why so many people are dissatisfied with their financial situation and blame others etc etc... again, you know all this ....

Sorry I'm jsut a bit confused, no need to bring me up to speed if you don't want to ... honestly, I'll be ok

 

[RumpledElf]

Because IP's are homes to our tenants, I think many Landlords struggle to find a balance between trying to improve their own wealth (through IP's) and keeping a tenant happy. Emotions are often involved especially where the Landlord feels that the 'poor' tenant is struggling.

Bah, people.

Personally I'd rather not be a landlord at all - what we'd most like to do is develop and sell. All the fun of creating something, a one-off burst of money and no need to bother with tenants.

Have to sell the last house first (which is 'only' going to give us about $60k in the bank after all is done), but the agent is showing people through like its going out of fashion so I don't think we have much to worry about there.

More than one way to skin a cat, not every property investor is going to be a buy-and-hold landlord.

 

[jaycee]

Bah, people.

Personally I'd rather not be a landlord at all - what we'd most like to do is develop and sell. All the fun of creating something, a one-off burst of money and no need to bother with tenants.

Have to sell the last house first (which is 'only' going to give us about $60k in the bank after all is done), but the agent is showing people through like its going out of fashion so I don't think we have much to worry about there.

More than one way to skin a cat, not every property investor is going to be a buy-and-hold landlord.

How dare you

On a property forum none the less !

 

[RumpledElf]

On a property forum none the less !

Eh, you can't say this stuff *outside* a property forum.

Was complaining to someone about having two houses the other day (one is empty and we just spent a lot of time cleaning it ... I don't like cleaning) and their reaction was "OMG YOU MUST BE RICH".

They're from Sydney. Nuff said. Fortunately his boss just happens to pay us at Sydney rates and we don't have Sydney expenses so I'm happy with this arrangement

We are SO not rich. I haven't had a Proper Job for a good few years now, youngest kid is over one year old now so technically I should be popping him in childcare about now and working some boring day job in a capital city instead of fluffing around with contract work while living in a regional with the baby zooming around the house terrorizing the cat.

 

[rugrat]

I think it often isn't a lack of ambition, but merely a difference in ambition.

Different people, different goals. Personally, I have only ever aspired to own around 5 properties by the time my hubby and I wish to retire. There is no rush, there is no pressure, and although I have no doubt we could have more if we so desired, we simply do not desire that. We have other goals and aspirations. Property is merely one part of the overall ambition. A means to an end.

So far we only have our PPOR and one IP. I beleive that we will likely wait another 4-5yrs before even seriously considering buying again. Because that is what suits us and our circumstances (35weeks pregnant with fourth baby, in no rush to go into the workforce). In the meantime we are looking at other (smaller) investment avenues, debt reduction and experience related expenditures.

 

[Deltaberry]

Whats the point if one keeps aimlessly going on There's no goal to chase thus motivation becomes an issue. How do you keep motivation up?

You can benchmark yourself against other people/businesses, but that doesn't mean you need to set a target.

Besides, setting a goal doesn't mean you'll be any more motivated. In fact I'd almost argue if you set a goal and make too rigid a plan, you'll miss things along the way.

 

[Deltaberry]

During your early acquisition phase surely you must be leveraged quite high?

That's not true - depends what high leverage is too... are you talking about 70% or 95%?

 

[Dan_p]

That's not true - depends what high leverage is too... are you talking about 70% or 95%?

80% to 85% is where we are at the moment and comfortable knowing that we are paying down ppor and hoping for cg over time before moving in to ip number 3

 

[Rixter]

You can benchmark yourself against other people/businesses, but that doesn't mean you need to set a target.

Besides, setting a goal doesn't mean you'll be any more motivated.

You are correct, the goal doesnt motivate. Its the call to action by attaching the time frame to attaining the goal that does. Thus my querry in relation to you not setting a time frame at all.

 

[jaycee]

You are correct, the goal doesnt motivate. Its the call to action by attaching the time frame to attaining the goal that does. Thus my querry in relation to you not setting a time frame at all.

So your assumption is that everyone should be motivated to buy houses and are curious as to why they are not ?

 

[Rixter]

So your assumption is that everyone should be motivated to buy houses and are curious as to why they are not ?

JC, nope. Im replying to delta in relation to goal setting and attaching a time frame is what calls one (motivates) to action .

 

[travelbug]

Exactly. With resi property I'd rather $2m worth of property with little or no debt than $7m worth of property with $5m of debt. It's fine (i guess) to keep on buying, but at each stage you are incresing your risk with each additional loan. Even if you are cashflow neutral it's still a big risk. I'd hate to be very sensitive to interest rate movements.

But the person with the $7m will (assuming doubling etc) have $14mill in property in 10 years with a $5 mill debt (=$9mill) VS your $2m property worth $4m minus debt = $3m.

I remember a little while ago one prominent forumite being sad with only "4 mortgages" You'd think this was the last thing you'd be worried about.

If you were refering to me. I wasn't SAD about only having 4 mortgages I just wished I had pushed myself further. Don't worry I have more now.

I'd rather live of the rents with a smaller portfolio as soon as possible than having a large portfolio with a large loan hoping for this to occur at some future date (while hoping the portfolio is still intact ).

Why would having less property get you more rent quicker? Each property I buy adds equity and cash flow to my portfolio, otherwise I wouldn't buy. No use purchasing properties that take you further from your goal.

 

[Deltaberry]

You are correct, the goal doesnt motivate. Its the call to action by attaching the time frame to attaining the goal that does. Thus my querry in relation to you not setting a time frame at all.

There are little benchmarks you use to judge yourself I guess. But there's no "end game" where you get there and say "ahhh okay I'm going to de-lever now and chill".

 

[Aaron_C]

Retiring is a very foreign concept. What do you do when you 'retire'? Just chill and eventually die? Makes no sense..

 

[jaycee]

Retiring is a very foreign concept. What do you do when you 'retire'? Just chill and eventually die? Makes no sense..

It's not that uncommon a concept at all

What are you talking about ?

 

[Aaron_C]

It's not that uncommon a concept at all

What are you talking about ?

How can you suddenly go from working for 40+ years and then suddenly stop? Businessmen never stop working

 

[Rixter]

Retirement in relation to cessation of employment is a working class concept.

 

[Aaron_C]

Retirement is a working class concept.

That is true. Being an employee all your life you never actually build anything so there's nothing to continue working on

 

[jaycee]

How can you suddenly go from working for 40+ years and then suddenly stop? Businessmen never stop working

I don't really know, you'll have to ask those who have done it..

But I'm not suggesting you dont have to retire if you don't want to... that's great if that's what you want to do.

 

[lizzie]

I remember a little while ago one prominent forumite being sad with only "4 mortgages" You'd think this was the last thing you'd be worried about.

That was possibly me - but perception is interesting. Just because one has "4" mortgages doesn't mean they are all at LVR 90%. Two are at around 50% and other other two are around 80%. Total LVR less than 60%.

What is holding us back is a) finding the right deal; b) inability to roll very large and poorly performing super into SMSF; and, c) servicibility (which is part of finding the right deal) as don't want to put large deposits in to "make" it positive.